Tax Return Terrors

Tax Return Terrors

As tax return filing season has come to an end, the IRS has made the growing problem of identity theft a top priority this year.According to the Internal Revenue Service, nearly one million tax returns and approximately $6.5 billion were associated with fraudulent tax refunds involving identity theft for the 2011 filing year. Most tax identity theft victims don’t even realize what has happened until they file their taxes, only to learn from the IRS that someone else has already filed and claimed their hard earned tax refund.

Here are some suggestions to reduce your chances of becoming an identity theft victim:

* Guard your personal information. Identity thieves can get your information by stealing your wallet or purse, going through your trash, or posing as someone who needs your information for a legitimate reason.

* Watch out for IRS impersonators. Don’t fall for phone calls, faxes, e-mails, or other contacts made by people claiming to be from the IRS. Don’t open any attachments in an e-mail or click on any link and certainly do not enter your personal information. The IRS never communicates with taxpayers about specific tax returns via email.

* Be vigilant in choosing a CPA. Make sure that they have a good reputation and ask them how they’re protecting your personal information.

* Protect information on your computer. Protect your tax information with a password, and once you’re finished with your tax data, take it off your hard drive.

* Keep an eye on your mailbox to ensure that you are receiving all of your expecting tax forms for example, W-2s and 1099s

How do you know if you are a victim of identity theft? Well, unfortunately, you may be a victim of identity theft and not have any indication that this has happened to you until you get a notice from the IRS telling you that:

* You filed more than one tax return, or someone has already filed using your information.

* You owe taxes for a year even though you didn’t file a return because you weren’t required to file.

* You were paid wages from an employer where you did not work.

If you get such a notice, respond to the IRS immediately and begin completing all of the necessary documentation to open an investigation, beginning with Form 14039, Identity Theft Affidavit. Also, notify all three credit bureaus that your identity has been compromised and consider purchasing a credit monitoring service.

Although the filing deadline only comes once a year for most, taking proactive steps year round can help avoid delayed refunds and stay a step ahead of identity thieves.

See Kristin’s article in the April edition of Forward Florida Magazine.